17 Nov 2017

RoHS Law Amendment Published, Exempting Cadmium-based Quantum Dots for Use in Display Lighting Applications, but for Limited Period Only

On 31 October 2017, a new law which amends Directive 2011/65/EU, more commonly known as the “RoHS 2” Directive, was published in the EU’s Official Journal. Hong Kong sellers of electrical and electronic goods will know that RoHS 2 restricts several hazardous substances in electrical and electronic equipment, including the substance cadmium.

The new Commission Delegated Directive 2017/1975 has been published so as to amend Annex III of the RoHS 2 Directive. Annex III sets out a list of exemptions to the general ban on the use of the hazardous substances. The amendment concerns an existing exemption for cadmium in colour converting light-emitting diodes (LEDs) for use in display systems.

The newly published Directive states that Point 39 of Annex III to the RoHS 2 Directive exempted the use of cadmium in colour converting LEDs for illumination and display applications, from the general ban, until 1 July 2014. The Commission received an application for renewal of this exemption before 1 January 2013.

Article 5 of RoHS 2 permits the Commission to introduce or renew exemptions under certain conditions, including where the reliability of the restricted substances’ substitutes is not ensured, or where the total negative impacts on environment, health and safety caused by substitution are likely to outweigh the total environmental, health and safety benefits from any such substitution.

The new Directive points out that colour converting LEDs using quantum dots have been shown to be advantageous as compared to earlier technology regarding energy efficiency and colour performance. The overall balance of the use of cadmium-based quantum dots in displays has a positive impact due to their lower energy consumption as compared to currently available alternative technologies. The total negative environmental, health and consumer safety impacts caused by substitution of cadmium-based quantum dots in display applications where quantum dots are used are likely to outweigh the total environmental, health and consumer safety benefits thereof.

It is thus stipulated that the use of cadmium selenide in downshifting cadmium-based semiconductor nanocrystal quantum dots for use in display lighting applications should be exempted from the prohibition. This exemption should last for two years after the publication of the Delegated Directive in the Official Journal. It is felt that this short validity period for the exemption is unlikely to have adverse impacts on innovation and the development of cadmium-free alternatives.

Hong Kong manufacturers should take note that, in comparison with the currently applicable exemption, the new exemption is more restrictive: a much lower threshold value is allowed, only the use of cadmium selenide (the inorganic compound actually used in the application concerned) is exempted and the applications are more precisely defined.

The new Directive also points out that cadmium-based quantum dot LEDs for illumination are not yet available on the market and their potential advantages in comparison with existing technologies are not properly quantifiable. Therefore, a renewal of the exemption as regards illumination applications is not justified. With regard to this particular matter, Hong Kong’s electronics sellers may recall that, in September last year, an objection from the European Parliament to an exemption for cadmium use in illumination and display lighting applications under RoHS 2 was published in the EU’s Official Journal. Common examples of such display lighting and illumination applications are LCD screens, which are used in televisions or desktop computers.

The Commission had received two applications from economic operators requesting an extension of this cadmium exemption under RoHS 2. Hong Kong business operators selling electronic equipment may already know that once an exemption is granted for a particular application under RoHS 2, it applies across the board to all producers, and not just to those that requested it. Hence, the importance of granting the exemption cannot be underestimated.

Following the applications, the Commission presented a draft Directive in 2015. The draft Directive divided the cadmium exemption into two parts, allowing (a) cadmium use in solid state illumination, which it proposed to extend until 30 June 2017 in order to ensure legal certainty for the illumination sector, and (b) the use of cadmium in downshifting cadmium-based semiconductor nanocrystal quantum dots for use in display lighting applications, which it proposed to extend until 30 June 2018.

The draft delegated Directive was then sent to the EU Council of Ministers and the European Parliament, which have the power to object to such legislation. Although the Council accepted the draft Directive, the Parliament decided to object based on changes in market conditions, especially those relating to cadmium-free products becoming available during 2015.

The Parliament took into account the fact that the Commission had explicitly stated that quantum dot (cadmium and cadmium-free) LEDs for lighting were not available yet and admitted that therefore the positive environmental impact of the exemption could not be demonstrated. It therefore explicitly recommended that the exemption should not be renewed. The Commission’s final position has been influenced by the European Parliament’s recommendation, and new Commission Delegated Directive 2017/1975, published on 31 October 2017, is the outcome.

In short, in Annex III to the RoHS 2 Directive, point 39 is replaced with the following text, thus allowing only the exemption mentioned in the text for this particular application:

Commission Delegated Directive 2017/1975 will enter into force on the twentieth day following that of its publication in the Official Journal. Member States are required to adopt and publish, by 12 months from the date of entry into force of the Directive at the latest, their national legal provisions complying with the Directive. They have to apply those provisions from 12 months after the date of entry into force of the Directive, plus 1 day.

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